Sport and recreation
This page explains when sport and recreation organisations may be considered to be charitable.
When are sport and recreation organisations charitable?
The promotion of sport and recreation in and of itself is not a charitable purpose. However, sporting organisations can qualify for registration as charities if the promotion of sport is the means by which a charitable purpose is pursued, for example the "advancement of education" or "promotion of health." They must also advance benefits for a significant section of the public, not primarily for an elite few.
In order for your sports organisation to be charitable, it must:
- have exclusively charitable purposes that fall within one of the four purposes set out in section 5(1) of the Charities Act 2005; and
- provide a public benefit; and
- not be carried on for the private benefit of any individual.
In all cases, Charities Services will assess each application on a case-by-case basis.
The two most common charitable purposes that sports groups advance are:
- advancement of education; or
- other purposes beneficial to the community.
Advancement of education
Courts have held that encouraging sport either in connection with educational institutions (schools or universities) is an essential part of education. For example, if they are providing sports sessions to primary schools.
Sport and recreation purposes for young people that have not been attached to educational institutions have also been held to be charitable if they have an express educational nature. For example, teaching children widely applicable life skills such as swimming would be considered educational.
For further information see Advancement of education.
Other purposes beneficial to the community
To be charitable under this category, your organisation’s purpose must be:
- beneficial to the community and
- within the spirit of the matters listed as charitable in the Preamble to the Statute of Elizabeth Act 1601 (otherwise known as the Charitable Uses Act 1601).
A sport and recreation organisation’s purpose may be charitable under this category if it:
- promotes health (for example, if they promote public health by encouraging the participation in cardiovascular exercise)
- promotes social inclusion (for example, a club that promotes sports for disabled persons or elderly or a club that actively encourages immigrants and other members of the community to interact and play with each other).
For further information see Purposes beneficial to the community.
Provision of a public facility for recreational purposes
Section 61A of the Charitable Trusts Act 1957 makes it charitable to provide facilities for recreation or other leisure-time occupation if the facilities are provided in the interests of social welfare and there is a public benefit. For example, providing a multi-sport field that is able to be used by the general public for a variety of purposes.
Does your organisation provide a public benefit?
To be charitable, your organisation must provide a public benefit. It is for this reason that sporting purposes must be directed towards amateur sports and not to professional or elite sporting.
Other reasons a sports organisation may not provide a sufficient public benefit include:
- if a sports club has exclusive membership or high fees;
- if the sport is excessively dangerous (in that the danger outweighs any potential health benefits); or
- if the club focuses on social activities rather than physical activities for a range of skills and abilities.
If you want more information about sporting purposes, the Charities Registration Board (and its predecessor the Charities Commission) have made a number of decisions relating to sporting bodies:
- Youth Glide New Zealand
- New Zealand Rowing Association Incorporated
- Northern Region Equestrian Trust
- Travis Trust v Charities Commission (a High Court decision).
In addition, a blog has been published on the issue of when sporting organisations can be considered charitable.